Calculation of Average Costs with Economies of Scope Dee's Dry

question 40

Multiple Choice

Calculation of Average Costs with Economies of Scope Dee's Dry Cleaning is considering a merger with Larry's Laundry Supply Stores.Dee's total operating costs of producing services are $600,000 for sales volume of $4 million.Larry's total operating costs of producing services are $200,000 for a sales volume (J_P) of $1 million.Calculate the average cost of production for the Dee's and Larry's firms,respectively.

• A)15 percent, 20 percent
• B)20 percent, 15 percent
• C)16 percent, 16 percent
• D)60 percent, 5 percent

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Definitions:

Thyroid Gland

An endocrine gland in the neck that produces hormones regulating growth, metabolism, and energy level.

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood. It controls basic emotions and drives, such as fear, pleasure, and anger.

Reinforcement

In behaviorist psychology, any event that strengthens or increases the likelihood of a behavior by providing a consequence an individual finds rewarding.

Behavior

Actions or reactions of individuals or groups in response to external or internal stimuli.